Wiley & sas business Series

   Competency Centers 
 Competency centers go further. They change the structure of the orga-
nization, drawing similar resources into one group. Their model is usu-
ally to act as a shared service center to support the broader organization. 

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 Their main attraction is consolidation and enabling economies 
of scale. Unlike “insights teams,” these centers have a narrow focus, 
usually defi ned functionally. They may specialize in predictive model-
ing. They often specialize in business intelligence. They may focus on 
machine learning. Integral to this focus is a longer-term strategy that 
outlines how the group will move toward best practice. They often go 
beyond ad hoc support to include actual delivery. While they don ’t 
own the outcome, they ’ll usually be responsible for making sure their 
work makes it into production. 
 There are signifi cant advantages to this model. By drawing common 
skills into one group, the organization starts developing  economies of 
scale through specialization. Clarity of focus also helps other groups 
get engaged. When skills are scattered, it ’s often hard for people to take 
advantage of latent capabilities. It ’s far easier for other groups to get 
engaged when there ’s a single team to contact. 
 It ’s also a tangible demonstration of strategic intent. Creating a 
defi ned group does wonders to clarify what the enterprise sees as 
a potential competitive advantage. It gives the organization a hook to latch 
onto and experiment with. Even if others don ’t necessarily understand 
the domain, they at least know it ’s there for them to take advantage of. 
 Despite their advantages, competency centers are still limited. 
For one, they maintain a siloed delivery approach. Because of their 
functionally defi ned focus, their engagement tends to align with tra-
ditional business applications and ignores developing enterprise-wide 
competencies. 
 For example, a risk competency center has the potential to add tre-
mendous value across the business. In addition to traditional  scoring 
and simulation activities, they could add real value through driving 
risk-based pricing and augmenting fi nancial planning to incorporate 
boundary testing. Unfortunately, this rarely happens. In the absence 
of specifi c direction, the team will usually gravitate toward traditional 
risk management processes such as managing operational risk or 
 identifying behavioral or application risk. When one ’s goal is being 
utilized rather than driving change, it ’s easier to sell to current rather 
than potential customers. Because of this, much of the cross-functional 
potential of business analytics is lost. 
 Another disadvantage is that because their domain is taken as a 
given, the team usually pays little attention to evangelism. A mandate 

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is both a blessing and curse. On one hand, it establishes responsibility. 
On the other, it ’s easy to assume that the rest of the organization will 
be just as interested and supportive. 
 In practice, this is rarely the case. By defi nition, any sophisticated 
area of expertise is niche. Not everyone in the organization will under-
stand it, let alone value it. Business analytics is fundamentally about 
change and driving change requires proactivity. While it ’s not inevita-
ble, competency centers often overlook the importance of evangelism 
and sales. Instead, they fi ll the role of a pure shared service center, 
responding to work requests as they fi le in. They end up being great 
at supporting business as usual and “known unknowns,” but transfor-
mation and tackling the “unknown unknowns” usually just becomes 
too hard.